More Stories

Informist, Thursday, Sep 12, 2024

--RBI Rao: Received feedback from banks on project finance norms 

--RBI Rao: Examining banks' feedback on project finance norms 

--RBI Rao: Final project finance norms to be out shortly 

MUMBAI – The Reserve Bank of India is examining the feedback received from banks on project finance norms, and the guidelines will be out shortly, Deputy Governor M. Rajeshwar Rao said on the sidelines of Infrastructure Conclave 2024, organised by the National Bank for Financing Infrastructure and Development today. He did not give a timeline for this.

 

The RBI's draft circular, released in May, proposes tighter guidelines on project financing, under which lenders would have to make provisions of up to 5% of the outstanding exposure during construction, against the current 0.4%. This would drop to 2.5% once the asset turns operational.

 

As per the proposed norms, lenders have to make the 5% provision in a phased manner – 2% in 2024-25 (Apr-Mar), 3.5% in 2025-26, and 5% in 2026-27.

 

Analysts said that as Indian banks and non-bank lenders have faced large defaults on infrastructure loans in the past, the  RBI's proposed guidelines are a pre-emptive step to avoid a repeat, given the recent spurt in infrastructure spending.  End

 

Reported by Kshipra Petkar

Edited by Avishek Dutta

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

 

Informist Media Tel +91 (22) 6985-4000

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2024. All rights reserved.